Middle market leaders are becoming increasingly confident about their ability to weather Brexit volatility. Many are cautiously optimistic that the UK’s departure from the EU will have a positive impact on their short-term and long-term business prospects.
RSM’s Brexit Monitor shows decision makers think Brexit will have a positive effect on their business over the next two years. Sentiment reached 113 (up from 108 last quarter) on a scale of 0 to 200 (where 0 represents a strong negative effect, 100 no effect and 200 a strong positive effect).
Sentiment about five-year prospects is even stronger, registering 122 on RSM’s Brexit Monitor. This is the highest score we’ve recorded since we began tracking middle market sentiment in May 2017. Even with few details about the UK’s future relationship with the EU emerging, businesses appear emboldened about their prospects.
Optimism is setting in across every industry. For the first time since May 2017, all sectors expect Brexit to have a positive effect on their two year and five-year business prospects. Construction firms are the most upbeat, followed by TMT, manufacturing, financial services and consumer. All sectors are more optimistic than when we started surveying them 12 months ago.
Likewise, businesses in all regions are confident about their company’s resilience over the long term. All areas of the country expect to emerge in a positive position after Brexit. The Midlands sees the future in the most positive light (132), closely followed by Scotland and the North East (125), then the North West (119), followed by the South (116), with London following closely behind (115).
Simon Hart, RSM’s Brexit lead partner, said:
‘Businesses feel confident in their own ability to offset the impending challenges, and that optimism is growing. These findings ultimately highlight the agility to change and the entrepreneurial spirit of the UK middle market. Nevertheless, there remains a real frustration within the middle market over the lack of clarity and transparency at government level.
'Put simply, these companies just want to get on with it. The apparent lack of efficient progress, and the uncertainty this presents, means businesses will continue to face challenges in their bid to make adequate preparations and to adjust their balance sheet and structures appropriately.’